Wednesday, May 14, 2008

Trapped in Credit Card Debt

New America's Higher Ed Watch blog has a great post by Ben Miller on how colleges and credit cards are teaming up to ensnare students into loads of credit card debt. (The post also includes an interesting fact I didn't know, which is that over 70 percent of students keep their first credit card for years -- now that's brand loyalty that companies would kill for -- and student credit cards often include much higher interest rates and more penalties).

Bob Reich also has a great post from yesterday on how credit card companies are similar to the mortgage industry in that they're dangerously underregulated -- they can raise interest rates at will and hide important information like how they calculate an outstanding balance. It also seems that the lobby in favor of keeping credit card companies that way is way more powerful than any force to enact legislation, and it's not just Republicans that are in the pockets of credit card companies. As Reich says "only 11 of 36 Democrats on the House Financial Services Committee have backed" legislation that would impose tougher regulations on credit card companies.

Cross posted


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